- As Bitcoin continues its range-bound trading phase, traders are placing their bets on which direction it will trend next
- This consolidation has caused the cryptocurrency’s volatility to plunge to lows not seen in over a year
- It is unlikely that this trend will last for too much longer, as extended bouts of sideways trading are typically followed by massive movements
- One technical pattern that is strikingly similar to that seen in 2019 is now suggesting that Bitcoin could be positioned to see notable downside in the coming weeks
- This comes as one analyst notes that it is “do or die” time for Bitcoin
Bitcoin and the aggregated cryptocurrency market have struggled to garner any clear momentum in recent times.
This is primarily due to the benchmark cryptocurrency’s multi-month bout of sideways trading that it has been caught within since May.
As for where the cryptocurrency could trend next, it does appear that the signs are all pointing in favor of sellers.
In addition to being unable to surmount a crucial level that it was rejected yesterday, the crypto has now dipped below $9,000 on multiple occasions without any ardent response from buyers.
One technical pattern similar to that seen in June of 2019 also spells trouble for what could come next.
Bitcoin Fails to Bounce After Posting Rejection at a “Bounce or Die” Level
At the time of writing, Bitcoin is trading up marginally at its current price of $9,100. The crypto has been trading at this level for the past few days.
Earlier this week, buyers attempted to catalyze some momentum that led it to $9,300 before it faced a harsh rejection.
As Bitcoinist reported yesterday, the rejection at $9,300 coincided with a rejection at the crypto’s 200-day EMA. As cited in the report, one analyst noted that it is now a “bounce or die” moment for BTC.
“4h was rejected from resistance of cloud (200 ema). Now resting on 21ema – bounce or die.”
Image courtesy of Teddy. Chart via TradingView.
It has maintained above its 21-day EMA in the time since but has yet to post any bullish reaction to this support.
This Pattern from 2019 Spells Trouble for BTC
In the summer of 2019, when Bitcoin posted its intense rally to highs of nearly $14,000, it formed a distribution pattern that ultimately resulted in its price entering a yearlong downtrend.
This decline eventually led it to lows of $3,800 this past March.
One analyst is now noting that there is a striking correlation between the distribution pattern seen last year and that being formed presently.
“90 day distribution at $10k – $13k vs 60 day current range for BTC,” he said while pointing to the below chart.
Image courtesy of Cold Blooded Shiller. Chart via TradingView.
If this pattern plays out as it did last summer, the crypto could soon see some significant losses.
Featured image from Shutterstock. Charts from TradingView.
